Finance (No. 2) Bill

Debate between James Wild and Caroline Nokes

Committee of the whole House
Tuesday 13th January 2026 Commons Chamber

[The Second Deputy Chairman]

I call the shadow Minister.

[James Wild (North West Norfolk) (Con)]

On behalf of His Majesty’s Opposition, I wish to speak to new clauses 22 to 24, tabled in my name and those of my hon. Friends. As the Minister set out, clauses 63 to 68 introduce measures to apply inheritance tax to unspent pension assets and other death benefits for deaths occurring after 6 April 2027.

This Labour Government have taken taxes to record levels, with £26 billion in additional taxes in this Budget and £66 billion since the election. These tax increases were not mentioned in Labour’s manifesto. Labour is increasing taxes on family businesses, farms, jobs, dividends, savings, motorists and now death. Removing the inheritance tax exemption for pensions could undermine efforts to encourage people to save at a time when people are not saving enough. And what do the Government do? They limit the salary sacrifice pension contributions scheme and introduce a new raid on people’s pensions pots.

The Minister did not refer to the impact assessment, but it is worth pointing out that it estimates that 10,500 estates will now become liable for inheritance tax, raising £1.5 billion by 2029, and 38,500 estates will pay more inheritance tax than was previously the case. That is why we oppose this extension of inheritance tax and the underlying principle, to which the Minister seemed to allude, that people’s money belongs not to them but to the state.

New clause 22 is straightforward. It would require the Chancellor to set out the impact of these measures on pension saving, household saving decisions and personal representatives. There is real concern—I am surprised the Minister did not address this—about the administrative burden being placed on personal representatives and the effect on the industry. Personal representatives will be required to identify every pension asset, calculate the inheritance tax due and ensure payment within six months, and they will be personally liable if they fail to settle all the liabilities due. In many cases, that deadline would be impossible to meet and must be extended. Furthermore, if a pension fund has to quickly sell illiquid assets, such as commercial property, it may not get the full market value, but the Bill does not introduce a relief where the underlying assets must be sold and the proceeds are less than the value of the assets at the time of death. Late payments will attract interest at 8%. By contrast, someone in self-assessment has 10 months to pay tax on the income they already understand.

Both the Association of Taxation Technicians and the Chartered Institute of Taxation have offered some practical solutions, the first of which is to extend the withholding periods. Personal representatives can ask pension administrators to withhold 50% of funds for up to 15 months, but that is simply not long enough for the complex cases I have referred to, particularly where business property valuations have to be agreed with HMRC. Will the Minister consider allowing HMRC to extend withholding in such complex cases?

Secondly, the Government should allow instalment payments for illiquid pension assets. Billions of pounds of pensions wealth are in illiquid assets. The Government allow inheritance tax to be paid over 10 years for illiquid estate assets. Why deny the same practical relief for pensions?

When this policy was announced, the Office for Budget Responsibility gave it a “very high” uncertainty rating and estimated that behavioural effects will cut the static yield by about 43%; the Government’s own forecasters accept that the changes may well significantly alter saving behaviour. The new clause would simply require the Chancellor to assess that impact and come to the House to make it clear.

New clause 23 would require the Chancellor to consult on the impact of clauses 63 to 67, and whether they deliver better outcomes for savers and pensioners. The truth is that the Government rushed the consultation out after the 2024 Budget and followed it with a very narrow technical consultation, which did not consider the principled question of whether this approach to pensions being brought within the inheritance tax framework was appropriate. As the Investing and Saving Alliance told the House of Lords Economic Affairs Committee in its inquiry to which the Exchequer Secretary also gave evidence:

“If we were consulted and listened to, we probably would not be having this discussion today, because I do not think pensions would be going into IHT.”

Both the chartered institute and the ATT have criticised the Government for consulting on pensions in isolation, rather than in the context of individuals’ wider inheritance tax position. Our new clause is explicit. Consultation must take place to assess whether these changes

“deliver better outcomes for savers and pensioners”

—wording that reflects the commitment the Labour party made in its manifesto.

New clause 24 is essential. It would require HMRC to publish comprehensive guidance on the new rules for pensions and to set up a dedicated helpline. Why does that matter? Because this measure will be incredibly complex in practice. The chartered institute has said that professional executors are already questioning whether they can continue to operate in the market at all. Some firms, we are told, are already leaving the market. If professionals step back, the burden falls on lay personal representatives: often grieving family members or friends, with more errors, delay and potentially a wider tax gap ensuing.

Professional indemnity insurers also need clarity, yet when is HMRC due to deliver detailed guidance? Not until spring 2027, just weeks before the changes take effect. That is completely outrageous and far too late. That is why the new clause requires guidance to be published within six months of the Bill being passed.

I want to touch on a broader concern that has been raised with me on the potential serious unintended consequences for unmarried couples. Today, couples can anticipate making financial provision for each other via pensions, but if this measure comes into force they will have to look at other options. If one member of an unmarried couple in their 50s or 60s dies with a pension at peak value, the survivor could lose up to 40% of that fund. Are Ministers talking to pension scheme administrators to mitigate the risks for such couples and to provide clear guidance?

These clauses increase taxes, add complexity, penalise saving and add stress for grieving families. Despite clause 67, we are also advised that there is still a risk of double taxation of inheritance tax and income tax, which could see beneficiaries paying an effective tax rate of 67%. Our amendments seek to mitigate their worst impacts. The Chancellor should assess the real impact on saving behaviour and personal representatives. She should consult properly on these provisions and she must provide clear guidance, backed by dedicated support. We should be incentivising saving and encouraging people to do the right thing. Extending inheritance tax does the opposite, and we will oppose the Government’s measures.

--- Later in debate ---

[The Second Deputy Chairman of Ways and Means (Caroline Nokes)]

I call the shadow Minister.

[James Wild]

These changes were presented as some sort of simplification and modernisation, but clauses 83 and 84 nearly double remote gaming duty from 21% to 40% and increase general betting duty to 25%. We will have some of the highest rates of tax on gambling in the world. As we have heard from some Members, the industry has warned that that could have severe consequences for an internationally competitive sector that supports tens of thousands of jobs, underpins horseracing and other sports and already contributes significantly to the Treasury. It is questionable whether these measures will lead to stable, long-term revenue gains for the Exchequer, and there is a very real risk that they will result in job losses and greater use of unregulated operators in the black market. New clause 25 would require the Chancellor to come back to the House and explain what the consequences have been for revenue, sports and horseracing, high street betting shops, the black market, jobs and the public finances.

Of course, the origin of these changes owes much to Gordon Brown, who encouraged the Chancellor to hike taxes in order to increase welfare spending. Proponents of higher taxes often suggest that they will not have any consequences, but it is the role of us in this House to scrutinise potential changes and assess the impact after the event. Independent modelling from EY shared by the Betting and Gaming Council suggests that the impact of doubling remote gaming duty could be the loss of 15,000 jobs, and a further 1,700 jobs could be lost as a result of the increase in general betting duty. In total, 17,000 positions located in Stoke-on-Trent, Leeds, Sunderland, Manchester, Nottingham, Newcastle-under-Lyme, Norwich and other areas could be affected. Of course, those are simply projections—they could prove to be pessimistic, and we certainly hope that will be the case—but when unemployment has risen consistently under this Government due to the jobs tax and other costs, such warnings should not just be dismissed. That is why the Chancellor must account for the impact of her choices, as new clause 25 requires.

There has been some mention of horseracing. I was pleased to join colleagues across the House in support of the “Axe the Racing Tax” campaign. That is another tax that the Chancellor wanted to introduce, but she was forced into one of her all-too-regular U-turns.

Finance Bill

Debate between James Wild and Caroline Nokes

Report stage
Monday 3rd March 2025 Commons Chamber

[James Wild (North West Norfolk) (Con)]

I beg to move, That the clause be read a Second time.

[Madam Deputy Speaker]

With this it will be convenient to discuss the following:

New clause 2—Energy (oil and gas) profits levy: impact assessment of increase in rate—

“(1) The Chancellor of the Exchequer must, within six months of this Act coming into force, commission and publish an assessment of the expected impact of Sections 15 to 17 of this Act on—

(a) domestic energy production and investment;

(b) the UK’s energy security;

(c) energy prices, and;

(d) the UK economy.

(2) The assessment must examine the impact of provisions in this Act in comparison with what could have been expected had the energy (oil and gas) profits levy remained unchanged.”

This new clause would require the Chancellor to commission and publish an assessment of the expected impact of changes to the energy (oil and gas) profits levy on domestic energy production, the UK’s energy security, energy prices and the UK economy.

New clause 3—Review of impact of tax changes in this Act on households—

“(1) The Chancellor of the Exchequer must, within six months of this Act being passed, publish an assessment of the impact of the changes in this Act on household finances.

(2) The assessment in subsection (1) must consider how households at a range of different income levels are affected by these changes.”

This new clause requires the Chancellor to publish an assessment of the changes in this Act on the finances of households at a range of different income levels

New clause 4—Review of impact of Act on small and medium sized enterprises—

“(1) The Chancellor of the Exchequer must, within six months of the passing of this Act, lay before Parliament a report setting out the impact of the measures contained within this Act on small and medium sized enterprises.

(2) The report must include an assessment of the impact of the Act on the following matters—

(a) the number of people employed across the UK by small and medium enterprises;

(b) the number of small and medium sized enterprises ceasing to trade; and

(c) the number of new small and medium sized enterprises established.”

This new clause would require the Chancellor to conduct an impact assessment of the Act on small and medium enterprises.

New clause 5—Review of the Impact of Tax Changes on Household Finances—

“(1) The Chancellor of the Exchequer must, within six months of this Act being passed, publish an assessment of the impact of the tax changes introduced by this Act on household finances.

(2) The assessment must evaluate how households across different income levels are affected by these changes.”

This new clause requires the Chancellor to assess and publish a report on how the tax changes in this Act impact households at various income levels.

New clause 6—Report on fiscal effects: relief for investment expenditure—

“The Chancellor of the Exchequer must, within six months of the passing of this Act, lay before Parliament a report setting out the impact of the measures contained in clause 16 of this Act on tax revenue.”

This new clause would require the Government to produce a report setting out the fiscal impact of the Bill’s changes to the Energy Profits Levy investment expenditure relief.

New clause 7—Pupils with SEND without an Education Health and Care Plan: review of VAT provisions—

“(1) The Chancellor of the Exchequer must, within six months of the passing of this Act and every six months thereafter, lay before Parliament a review of the impact of the measures contained in sections 47 to 49 of this Act on pupils with special educational needs and disabilities.

(2) The review must consider in particular the impact of those measures on—

(a) children with special needs who do not have an education health and care plan (EHCP); and

(b) the number of children whose families have applied for an EHCP.”

This new clause would require the Government to produce an impact assessment of the effect of the VAT provisions in the Act on pupils who have special educational needs but do not have an Education Health and Care Plan.

New clause 8—Review of sections 63 and 64—

“(1) The Chancellor of the Exchequer must, within six months of the passing of this Act and every six months thereafter, review the impact of the measures contained in sections 63 and 64 of this Act.

(2) Each review must consider the impact of the measures on—

(a) Scotch whisky distilleries,

(b) small spirit distilleries,

(c) wine producers and wholesalers,

(d) the hospitality industry, and

(e) those operating in the night-time economy.

(3) Each review must include an estimate of administrative and operational costs for the preceding 12-month period for each of the sectors listed in subsection (2).

(4) Each review must consider the impact of the measures on the retail price for consumers of products subject to alcohol duty.

(5) Each review must also examine the expected effect of the measures on the domestic wine trade.

(6) A report setting out the findings of each review must be published and laid before both Houses of Parliament.”

This new clause would require the Government to produce an impact assessment of the measures on the Act on distilleries, wine producers and the hospitality industry.

Government amendments 1 to 17.

Amendment 67, page 53, line 30, leave out clause 47.

This amendment removes Clause 47, which removes the VAT exemption for private school fees.

Amendment 68, page 56, line 13, leave out clause 48.

This amendment removes Clause 48, which introduces anti-forestalling provisions.

Amendment 69, page 56, line 13, leave out clause 49.

This amendment removes Clause 49, which sets out the commencement date.

Government amendments 18 to 66.

[James Wild]

I will speak to new clauses 1 to 3, and amendments 67 to 69, tabled in my name. It is 124 days since the Chancellor delivered the first Labour Budget in 14 years—the so-called growth Budget—but it feels like longer. Inflation is up, taxes are up, borrowing is up, unemployment is up and energy bills are up. I could go on, but most tellingly of all, growth is down. The Bank of England has just cut its growth forecast for this year in half, to just 0.75%. Little wonder that business confidence has plummeted, with firms warning of fewer jobs, lower wages and higher prices. Instead of backing risk takers and supporting wealth creators, as the Conservatives do, this Finance Bill and the Budget attack enterprise and deliver lower growth, higher borrowing and higher taxes.

I turn to new clause 1, concerning pensioners. Millions of pensioners were left out in the cold this winter when the Government took away their winter fuel payments. Millions of people in receipt of only the state pension now face paying income tax on it.

Crown Estate Bill [Lords]

Debate between James Wild and Caroline Nokes

2nd reading
Tuesday 7th January 2025 Commons Chamber

[James Wild]

With the leave of the House, it is a pleasure to respond briefly on behalf of His Majesty’s loyal Opposition. [Interruption.] I do not know whether there is a party going on to which I have not been invited, but I am personally very happy to be here to take part in the debate.

This has been a good debate, with more than 10 Members contributing, and not only from coastal areas such as my Norfolk constituency; we have also heard from the hon. Member for Lichfield (Dave Robertson), which underlines the importance of the Crown Estate to all our constituencies.

The hon. Members for Truro and Falmouth (Jayne Kirkham) and for Camborne and Redruth (Perran Moon) spoke about the potential benefits of investment in their constituencies and their part of the world, including the funding of college courses, which are important, as well as investment in energy production.

The hon. Member for Mid and South Pembrokeshire (Henry Tufnell) may want to get some tips from the hon. Member for Great Grimsby and Cleethorpes (Melanie Onn) about how to get on with the Crown Estate, how to get it to do what he actually wants it to do, and how to secure the benefits for his constituency. Perhaps he can have a reset with the Crown Estate.

A number of Members spoke about community benefits, which are very important to securing public support for new infrastructure, be that energy or other issues. Labour Members spoke quite a bit about cutting energy bills. I distinctly remember the pledge they all made during the election campaign to cut energy bills by £300, but energy bills are going up and there is no date for when they will come down. Voters and constituents will remember the pledge and, at the moment, all they can see is their costs going up. The concern is that the pace at which the Energy Secretary wants to drive forward will actually drive up costs for all of our constituents.

I began my remarks by emphasising that the Crown Estate is neither the property of the Government nor part of the sovereign’s private estate. That is key. Its core purpose is to maintain and enhance the value of the estate and the income derived from it. That is why greater transparency is needed about the partnership with GB Energy. The Minister will have heard and, I am sure, noted down all the questions from my opening speech, so I will not repeat them all, but I will repeat this: will he commit to publishing the partnership agreement before we head into the Committee stage?

I am afraid that some of the contributions we have heard have only fuelled my suspicions of the Government’s intention to use the Crown Estate as a vehicle for its energy policy and as a provisional part of the GB Energy body, whatever that may turn out to be. That raises issues about how investments will be determined and the returns that are generated for the taxpayer, as well as the risk surrounding investments, whether crowding in, as hon. Members have referred to, actually happens, whether investment in ports will drive a return, and why commercial providers are not seeking to make similar investments. That conflict and risk was one of the concerns of my right hon. Friend the Member for The Wrekin (Mark Pritchard), who is sadly not in his place. I hope that the Treasury Committee will engage with that point when it examines the nominated new chairman of the Crown Estate commissioners.

That is also why it is important that Parliament has oversight of borrowing limits, rather than that just being in an MOU that can be changed at the Treasury’s whim. That is an important protection that we have in place, and I know that the Minister will also respond to that point in his remarks. Will he also get back to the specific point I raised about disposals and the seabed, and the commitment that Lord Livermore made on Report in the other place about protections and whether an amendment is needed and will be forthcoming?

To conclude, there is wide support for the Bill from across the House, but the short-term interests of the Government should not come at the long-term expense of the Crown Estate and the nation. I look forward to continuing the scrutiny of the Bill in Committee.

[Madam Deputy Speaker]

I call the shadow Minister to wind up.